The leaders of the four main churches in Northern Ireland have criticised the lending practices of the banks.

They have accused them of "holding back recovery, and putting businesses and their employees at risk".

The churchmen are calling on them to adopt a more understanding and positive approach when dealing with businesses.

The British Bankers' Association branded the statement "shocking" and said that lending to small businesses had risen by 5% in the past year.

Concerns

The church leaders want to meet with representatives from the banks and the Treasury, as well as local politicians to highlight their concerns.

They said while they were not advocating a return to the high-risk lending practices which led to the economic downturn, they wanted to see a balance between measures aimed at restoring the strength to the banking sector and ensuring the survival of businesses.

The initiative comes after a number of prominent businesses across Northern Ireland approached the Church of Ireland Archbishop of Armagh, The Most Reverend Alan Harper for his help.

The President of the Methodist Church, the Reverend Paul Kingston and the Moderator of the Presbyterian Church, Dr Norman Hamilton are also involved.

Some of the experiences of businesses which have approached me are quite shockingAlan Harper, Church of Ireland Archbishop of Armagh

Cardinal Sean Brady said the current situation where solid businesses were being denied the capital required to remain competitive was unsustainable.

Archbishop Harper said he and his colleagues had been collecting examples of the way in which the banks have failed, in their opinion, to live up to their obligations or to operate according to the norms of best practice.

"We appreciate that the banks have a duty to restore strength to themselves and their sector overall.

"However, some of the experiences of businesses which have approached me are quite shocking, leading to instances of decent businesses, and decent business people being placed under immense pressure with the ultimate danger of closure and job losses which affect the whole community.

"I am concerned for people in business, for their employees and for the long term economic growth of our economy and I believe that it is time for a more positive approach from the banks.

Archbishop Harper said there was a "tangible risk" to the economy by banks seeking to restore their own balance sheets too quickly.

"That risk translates into a threat to jobs and family income for the rest of us inflicting additional misery on businesses and their employees."

'Shocking'

British Bankers' Association spokesman, Brian Mairs, said that the churchmen's statement used "shocking language" and insisted that banks had supported their customers during the downturn.

However, he added that depositors expected banks to be sensible with their cash.

"We are in a global downturn and that is affecting the cost of money right across the world," Mr Mairs said.

He stressed that his organisation and its members would be willing to meeting with the church leaders to discuss their concerns.

Speaking later on Thursday, Archbishop Harper said he was pleased that the churchmen had received a response to calls for dialogue.

He said he hoped the banks could move to a position which recognises the strain they were placing on businesses.

The four main High Street banks in Northern Ireland, the First Trust, the Ulster Bank, the Northern, and the Bank of Ireland confirmed they had received correspondence from Archbishop Harper and have accepted his invitation to meet.

The four main banks have also released statements, following the intervention.

The Ulster Bank and Northern Bank said they had both accepted an invitation to meet church leaders.

The Northern Bank said it had committed £500m in business loans in 2009, while the Ulster Bank said it lent £290m to small and medium enterprises that year.

First Trust said it was supporting its customers while the Bank of Ireland said it welcomed the opportunity for engagement and was taking steps to encourage recovery and growth.

All four banks have suffered huge losses during the financial crisis with Ulster Bank, First Trust and the Bank of Ireland all needing enormous taxpayer-funded bailouts from either the British or Irish governments.